Spending money due to the fear of missing out (or FOMO) is costing Brits nearly £9 billion a year, according to our latest research.1 And it’s also making us more susceptible to getting into debt and damaging our credit scores, as we turn to credit to try and keep up with others.
What is FOMO spending?
FOMO spending is when you give in to peer pressure and spend money – even if you can’t afford to – because you’re afraid of missing out on doing things with friends and family, or want to make sure you have the same things as others.
Where’s the danger with FOMO spending?
The danger around FOMO spending comes when you start living well beyond your means to keep up with others. Our research showed that over a quarter of UK adults (27%) have gone into debt because of FOMO spending and a third (34%) of those we spoke to said they overly rely on credit when they FOMO spend.2 And it’s this reliance on credit that can bring the danger. Why? Because if you’re maxing out credit cards and not thinking about whether you can comfortably afford the repayments just to make sure you’re not left out of things, you could find yourself in trouble. By missing payments and using all your available credit, you could struggle to get back on track and your credit score may take a hit, which could have implications for any future credit applications you need to make.
So, with this in mind, here’s our top tips to help you avoid the pressure of FOMO spending…
Remember, it’s ok to say no
There’s always going to be a bit of pressure to join in with everything your friends are doing, particularly at the start of a new year when people start planning getaways and other fun things for the year ahead. But if you know your financial health is going to suffer and you’re going to struggle to be able to afford to do everything, then don’t be afraid to say no to things. Be selective and suss out what you can and can’t afford before committing to anything. The worst thing you could do is to say yes straightaway and then find yourself having to max out your credit cards to be able to do everything. Real friends will understand.
Don’t be afraid to suggest alternatives
If your friend is suggesting a lavish hen/stag do or weekend away abroad that will end up costing everyone a fortune, why not suggest an alternative that’s not going to break the bank if you can? What makes a weekend away with friends is having everyone there and it shouldn’t really matter where you go. Get people round to someone’s house or rent somewhere cheap through Airbnb and throw a party there – you can choose the music you want, the food to eat and all the activities. It’s cheaper and a much better way to have a proper catch up, so don’t be afraid to suggest something different.
Plan out your year
A great way to start a new year is to sit down and make a list of everything you know you’ve got going on this year – including anything your friends or family have mentioned that you’re considering joining in with. In one column make a list of the things you know you’ll definitely have to commit to, for example a friend’s wedding, and then in another column list the ‘nice to dos’ – the things you’d like to do, but aren’t a must. Then, have a go at costing up how much each thing will cost. And don’t forget to include everything – for example, if it’s a friend’s wedding there’ll be things like travel costs, a wedding gift, and a new outfit to factor in as well. Once you’ve totalled everything up, you can thoroughly suss out what you can and can’t afford to do.
Once you’ve got an idea of how your year is panning out and how much it’s all going to cost, it’s time to pull together a budget. Look at what money you have coming in each month and then look at how much will need to go on your essential outgoings, like rent or mortgage payments, bills and any direct debits. You can then have an idea of how much money you have left. If you know you’ve got a big social event or holiday coming up, figure out how much money you could comfortably save towards this. That way you’ll have money saved up in advance, rather than it all having to come out of a month’s wage. Find out more on budgeting here.
Consider a break from social media
FOMO can really kick in when you’re on social media and you see your friends having an amazing time without you. It’s only natural to feel a bit jealous and left out, which can in turn tempt you to push yourself financially so that you can be involved next time. If you’ve had to turn a holiday with friends down because you can’t afford it, then consider taking a break from social media while they’re away. That way, you won’t be constantly reminded about it and it’ll help you feel less like you’re missing out.
We hope you find these tips helpful. You can find further tips on how to avoid impulsive spending here.
And if you’re gearing up for a positive start to the new year, click here to see what your motto for 2019 should be.
1 Noddle commissioned Opinium Research to interview 2,008 GB adults online from 16-20 November 2018. Results are weighted to be representative of the UK population.
35% of all UK adults (52.079m) admit to FOMO spending = 18.23m. These people spend on average £491 each a year in FOMO spending situations = a total of £8.95bn or approx. £9bn a year
2 Statistics taken from same study – Noddle commissioned Opinium Research to interview 2,008 GB adults online from 16-20 November 2018. Results are weighted to be representative of the UK population.